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Keeping Your Business Out Of  Trouble And On Track

Issues 22

In 2016, SME report was themed “Breaking Barriers” which meant for SMEs to make necessary adjustments to overcome challenges in facing a new business era on Industrial Revolution 4.0, digitisation and technological convergence, regional integration and other mega trends.

In the last one decade, Malaysian SMEs growth exceeded that of the overall economy which saw an average growth of SMEs annual rate of 6.7% compare to the overall average growth of the economy of 5.3%. As a response to this favourable growth, under the Eleventh Malaysia Plan (11MP), entrepreneurship has been identified as one of the national priority areas towards attaining Vision 2020.

The Global Entrepreneurship Monitor (GEM) which is an internationally-recognised benchmark of entrepreneurial activities reported that one interesting features of Malaysia SMEs is its opportunity driven instead of necessity driven. If this trend continues, there is a strong upward trend for SMEs to seek new adventures based on entrepreneurial motivations.

The traits of opportunity-driven entrepreneurs are relatively more innovative while necessity-driven entrepreneurship is generally influenced by the economic conditions of an individual. The recent trend displays a declining trend of necessity-driven entrepreneurship and an increasing trend of opportunity-driven early-stage entrepreneurship and Malaysian entrepreneurs are willing to take risk in order to succeed.

To further enhance SMEs prospects to record favourable growth, the Government has in place a clear policy to support SME development and entrepreneurship

Thus the Government is focusing on a holistic approach to SME and entrepreneurship development. These include policy development, financing and guarantee schemes, registration and licensing, start-up and development process, outreach and awareness programmes, as well as information and advisory services.

In 2016, there were 125 programmes to build up the capacity and enhance access to financing of SMEs. This move has seen the departure from total dependency from banking facilities which accounts for 96% financing to SMEs to new avenues such as crowdfunding, venture capital and peer-to-peer funding. The advent of Financial Technology (Fin-Tech) makes it cost saving and time effective in obtaining these funding facilities.

As a response to these encouraging trends in Government focus on SMEs, we at KIQ has set up a department specifically created to support our existing multi-discipline SMEs organisations. We are also looking into working with future clients. To further open options for our clients we have formulated various packages to suit the need of each SME depending on its needs and budget.